Case Study #3: Building Business Acumen

Client: Top 10 Insurance Carrier

Simulation Used: Insurance Challenge™ (version 101)

Specific Business Need: Build financial and strategic acumen specific to the property and casualty insurance industry.

Solution: Insurance financials can be extremely complex due to the deferral of some expenses, the estimation of reserves to cover future claims, and regulation that varies by each state. PriSim’s® client needed a course that would enhance and expand their future leaders’ ability to speak this complex language of insurance finance. The course also allows participants to practice strategies during changing competitive and economic conditions. In addition, the carrier staff needed to become familiar with agency operations, which represent the company’s distribution channel.

PriSim® designed and built a custom insurance-specific business simulation reflecting the unique attributes of the property and casualty insurance business and agency operations. Industry-specific dynamics were designed into the simulation and critical concepts built into the lecture content including:

• Combined Ratio, Loss Ratio, and Expense Ratio
• Loss Reserves, Loss Tails, Claims, and Loss Control
• Underwriting Expenses
• Agency Operations and Customer Retention
• Reinsurance

Results:
Improved financial acumen in participants targeted as the future leaders of the organization. Unfamiliar, industry-specific terms such as IBNR (losses that are “Incurred But Not Reported”) become part of participants' new language of leadership. Developed participants’ high-level strategic thinking in mission-critical areas such as product management during “hard” and “soft” markets that can dramatically impact carriers' pricing power. Provided insights into agency operations and the nature of an insurance carrier's close partnership with independent agencies, brokers, and captive agencies.